Why We Ban Penny Stocks on StockTwits

We have never recognized or allowed OTCBB or Pink Sheet stocks on StockTwits.  We do not include them in our database.  We’ve taken a bunch of criticism for this and I am sure we have blocked messages and users that were on the up and up.

In addition, we actively moderate the community, curate content and we have a Flag feature which allows our community to assist us in moderation.

Yesterday, it was reported that Facebook and Twitter were used in a penny stock pumping scandal.

From the NY Times:

Facebook and Twitter social networking sites were used to tout stocks in a classic “pump and dump” fraud of about $7 million that was uncovered during a cocaine-trafficking probe, U.S. prosecutors said on Tuesday.

Documents filed in Manhattan federal court said the 11 were from New York, Florida and Pennsylvania. They are accused of orchestrating web site links that touted picks in four penny stocks said to be based on the authors’ expertise and independent research.

While our zero tolerance policy to penny stocks isn’t perfect and we may occasionally block users and content that are benign, it has assured that our community will not be subject to the type of con men desribed in the above article.

We will always remain vigilant  in this regard and that the very best content is emphasized and the very best StockTwits members are highlighted.

Trading is hard enough without being faced with fraudulent solicitations.

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